Political Tremors and Social Discontent Shake Up Turkey

Michael Werbowski, Istanbul, Turkey, March 24, 2008

In a speech in Siirt, on March 15, Prime Minister Recep Tayyip Erdogan of Turkey called moves by Turkey's chief prosecutor to ban the Islamist-rooted ruling party and bar the president and prime minister from politics "an attack on the will of the nation." (Photo: STR / AFP-Getty Images)

The news on Friday, March 14, that Turkey's chief prosecutor had filed a law suit that might shut down or virtually ban the ruling A.K.P. (Justice and Development Party) and its leaders from political life shook up the country.

The grounds for the threatened closure were justified according to Abdurrahman Yalcinkaya, the chief judge in the case, as the A.K.P. is "a hotbed of anti-secular activities."

This latest action taken by the courts adds another layer of mayhem to other prolonged legal battles being played out in the country, between the secularists and advocates of greater religious Islamic freedom. The court's move rattled the Turkish stock market that following Monday, adding to the current state of uncertainly.

This "coup de theater" takes place as the headscarves debate still rages. Moreover, a constitutional legal mess is likely to ensue if the courts decide to close down the governing party in power amid other domestic unresolved conflicts.

The surprise move comes at a very tense time in Turkey. The country recently pulled out of northern Iraq after a brief military offensive against armed rebels of the Kurdistan Workers' Party (P.K.K.) and now has to deal with a new and possibly crippling crisis.

Why now?

The upper echelons of the bureaucracy are still manned by ardent observers of the precepts of secularism, which seem to be eroding daily. To add to this mess, the country is supposed to be in the process of drafting a new and revised constitution.

Perhaps the lifting of the ban on headscarves in February by a vote in parliament prompted the judges to try to outlaw the A.K.P. This could be seen as a last line of defense against the rising influence of Islam, or as an attempt to keep in place the firewall between the state and the rising influence of Islam.

In the land of outlaws and despots, one ban leads to another.

The charges against the A.K.P., whether fabricated or factual or politically motivated, were based on recent news stories and have added much grist to the rumor mill, while fueling all kinds of conspiracy theories about the A.K.P.'s alleged hidden agenda: to introduce a Sharia-like regime under Koranic rule inspired by Iran.

Headscarves: The Straw That Broke the Camel's Back

The charges are serious, as they claim the A.K.P. is threatening the secular republic. The case made against the A.K.P. seems to stem from moves by local mayors to ban the sale and consumption of alcohol in certain municipalities and to create gender-segregated parks.

There are noticeable signs of the "gradual Islamization of our daily lives" as columnist Mehmet Ali Birand recently remarked in the Turkish Daily News (March 13). For example, Prime Minister Recep Tayyip Erdogan sprinkles his speeches with overt references to Islamic texts or uses other "Arabic and Koranic expressions," notes the political commentator.

In society, men greeted themselves with pecks on the cheeks or a handshake not long ago. Yet since the A.K.P. came to power, this is seen less in society, and any salutary contact with women is increasingly frowned upon. More men go to daily prayers at the city mosques, and public spaces are becoming "women only" and "alcohol free zones," Ali Birand notes with some consternation.

Another indication the government has very conservative religiously related views on the role of Islam in society is its anti-feminist rhetoric. On International Women's Day the prime minister exhorted women to bare at least three children. Yet not all potential mothers were impressed with this patriotic call to do their reproductive duty. At one rally, a placard said, "If you want us to have three children, then you look after them!"

Turkey's Big Squeeze

Fridays are inauspicious in Turkey. Coups took place on this day. The state prosecutor made his recent indictment on a Friday. If this was not enough, trade unions throughout the country declared a "partial strike." Transportation workers, teachers, nurses and other public sector employees marched to the heart of the city in Taxsim Square, protesting against government plans to reform the social security pension system and curb their unemployment and retirement benefits.

These International Monetary Fund-imposed reforms are designed to further cut government spending, while making sure that Turkey obediently sticks to fiscal discipline and remains on the road to more reform; in other words, they are designed to keep inflation low while interest rates remain high in order to lure more international investment into the country.

Is Turkey the Sick Man of Europe or a European Tiger?

Local financial reporters bewail the current account deficit, which worsened to $38 billion in 2007. Turkey continues to import much more than it exports. There is also a widening trade deficit, which runs at about $6 billion. This contributes to the domestic debt.

Revenue generated by massive privatizations of state-owned industry helps to pay off increasing foreign debt. Meanwhile, The I.M.F. keeps the country on a short and tight leash, making lending available on very strict conditions.

Inflation, the nation's biggest scourge and potential bugaboo, officially remains very low according to Turk Stat (the government agency)—about 1.29 percent monthly. Yet these figures seem deceptively low when you shop for basic foodstuffs in the markets or fruit stalls.

Is the hangover from the 2001 crisis over?

In 2001, the country was deeply shaken by a banking crisis that wiped out many foreign investors and saw financial institutions collapse. Since then, the banks have risen from the ashes. And there has been a resurgence in foreign direct investment into the country, partially thanks to very high interest rates in banks and on government-issued bonds sold on the global market.

Last week a top Turkish economist, including the economic minister, in the wake of global financial turmoil, has reassured investors that Turkey is much more resistant to internal and external shocks than ever before.

This sounds reassuring, but with the specter of more market turbulence on the horizon and the current I.M.F. loans package due to expire (which must be either renewed or canceled in May 2008) much uncertainty remains ahead.

I.M.F.'s Panacea: Privatization, a Brief History

Today, Turkey is still undergoing massive privatizations that began after the 1980 military coup. The I.M.F. and World Bank stepped in after the military take over and implemented what was known then as the "Jan. 24 measures," which meant the new regime had to decrease public spending and commit itself to the precept of a free market economy. Furthermore, repayment of I.M.F. loans and foreign debt was paid for by massive privatizations in the energy and transport sectors, among others.

These measures were supervised by the World Bank and the Wall Street investment bank Morgan Stanley, which worked with the state planning organization to implement a so-called privatization "master plan." According to professor Esra LaGro this plan was elaborated by a select few in the 1980's "when experience with privatization was next to zero" in Turkey ("Privatization in Turkey: An Evaluation," Esra LaGro of Bogazici University, European Studies research platform, 1999).

Furthermore, in the 1990's, a bevy of privatization laws was passed. And according to LaGro's academic paper, since 1980, 121 state-owned companies were privatized of which 102 have no state shares whatsoever left over. A long list of sectors sold off to private foreign interests from 1985 to 1997 include: the telecommunications and banking sector, milk and dairy producers, the iron and steel industry and Turkish cement factories.

Turkey: The Grand Bazaar

These privations were carried out with a weak legal framework in place, mired by a "lack of transparency" and a lack of public consultations on the issue. To this day the process is running full steam ahead with further sell offs due in the Turkish tobacco industry to British American Tobacco. Also on the future agenda, is the sale of highways and tollbooth operations.

These sales generate revenue for the Turkish government, yet most of the redeemed value of these companies goes to pay off foreign debt payments or gets funneled abroad. And little is reinvested in the country's health and education system as a result. The recent labor unrest, the "liquidity crunch" worldwide and the prosecutor's attempt to interdict the A.K.P. may slow the pace of growth and privatization too in Turkey soon. Or more ominously, perhaps, plunge the country into another 2001-style economic crisis.